The National Payments Corporation of India (NPCI) has scheduled a meeting with smaller UPI players and select banks on March 5 to deliberate on the 30 percent market share cap for individual apps within the digital payments ecosystem. The objective is to foster a more diverse and inclusive system.
NPCI oversees the UPI platform, which commands 80 percent of the digital payments market in the country. However, major players like PhonePe, Google Pay, and Paytm collectively dominate nearly 95 percent of the UPI transaction volume and value.
According to an anonymous fintech participant, the meeting aims to solicit ideas and proposals from all stakeholders on how to regulate market share without disrupting the payments landscape.
Among the smaller players in the ecosystem are BHIM (operated by NPCI), various bank apps, Amazon Pay, Cred, Jupiter, and Slice, among others.
While the meeting is scheduled for the evening, some participants were informed at short notice about the session. Despite earlier denials, the sudden announcement underscores the urgency of the matter.
PhonePe currently holds a 47 percent market share, with Google Pay close behind at 36.4 percent. Meanwhile, Paytm’s share has dwindled to 11 percent amid regulatory challenges faced by its banking arm, as reported by Moneycontrol.
There are concerns that further decline in Paytm’s market share could lead to increased dominance by the top two players, potentially resulting in a duopoly.
Initially, NPCI had set the deadline for capping market share at 30 percent by the end of 2022, which was later extended to 2024. The extension was necessary to avoid disruption for end-users and prevent limitations on customer onboarding and transactions.
Recently, a parliamentary panel highlighted the dominant position of PhonePe and Google Pay in the UPI market, both of which are majority-owned by US-based companies.
